Conditions Flashcards
Define a Condition (RS 224):
A condition is an event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due.
What are the two types of conditions?
1) Expressed
2) Implied
What are two types of Expressed Conditions and what are each type?
1) Precedence - activates the contract
2) Subsequent - Terminates the Contract
Where do implied conditions comes from?
They are supplied by the court
What are the 3 types of “orders of performance” for the parties in conditions?
1) Independent of each other;
2) Dependent of each other.
3) Mutual or concurrent
What is required of both parties for a mutual or concurrent condition?
Both parties must be ready, willing, and able to perform.
What is the function of a condition?
To allocate risk
What is the legal consequence of a condition?
1) Excuse performance (precedent)
2) terminate performance (subsequent)
Can the passage of time be a condition?
No, the mere passage of time is not a condition, because there is no uncertainty. Time will pass whether we like it or not.
What happens if a condition precedent does not occur?
The non-occurrence of a condition precedent by a party to a k, allows rescinding by the adversely affected party.
What occurs when parties have multiple different contracts and a party breaches one of the contracts?
Breaking one contract does not necessarily mean a breach of all contracts between the parties UNLESS there is a cross default condition which means that the satisfied conditions in the two contracts are connected and a breach in one results in a breach of both.
If language is unclear between creating a duty or a condition then which will the court tend to choose and why?
If language is unclear, a court will prefer an interpretation that imposes a duty rather than a condition because in this situation a court can step in immediately to assist with a duty, but not with a condition.
What is common language of a duty?
Required, must, promise, shall, mandatory
What is common language of a condition?
If-Then, based upon, contingent, Under the condition that…, depending upon.
Who makes the decision as to a decision:
1) of the meaning of language within a contract;
2) The interpretation of the document and parties intentions?
1) The meaning of the language is a factual decision for the jury to decide
2) The interpretation of the document and the parties intention is a decision of law which is a judges decision.
Under satisfaction clauses what type of things are held to:
1) the objective standard?
2) Subjective standard?
3) Third Person standard?
1) Objective standard is held to the reasonable person standard and is used for items of value, fitness, and quality.
2) The subjective standard is a decision of judgement and is used for fancy, taste or judgement.
3) The third person standard is used when an architect, engineers, etc. has the final say and must sign off on the item.
What is a claim of dissatisfaction made in to be held valid?
It must be made in good faith rather to escape a bad bargain to be deemed valid.
